Economic growth across the Americas region may pick up at a faster pace in 2018, S&P Global Ratings said in its Americas Economic Snapshot — February 2018 report.
The rating agency said it expects U.S. real GDP to grow by 2.8% in 2018 from an annual rate of 2.3% in 2017. S&P also expects the Federal Reserve to raise its benchmark interest rate by 25 basis points three or possibly four times.
S&P said, however, that a faster normalization in the U.S. monetary policy could drive heightened volatility in financial markets and discourage capital inflows into Latin America.
Latin American economies will continue to recover in 2018 provided that external conditions remain favorable, S&P said.
Meanwhile, the rating agency expects the North American Free Trade Agreement renegotiation will lead to an outcome that broadly preserves trade and investment linkages among the U.S., Canada and Mexico. However, reaching a deal may be more politically challenging should the talks run long, especially as the Mexican presidential election and U.S. midterm elections draw near, according to S&P.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.